We found out in our recently completed SMB Group 2012 SMB Mobile Solutions Study, in which we asked 717 U.S. SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers and influencers about their mobile solutions environment, including:

• Mobile Device and Service Provider Use and Plans
• Use and Plans for Internal (Employee) Mobile Business Solutions
• Use and Plans for External (Customer, Partner, Supplier) Mobile Business Solutions
• Use and Plans for Mobile Web Sites
• Benefits and Obstacles to Using Mobile Solutions
• Use and Plans for Mobile Payments
• Mobile Budgets
• Mobile Procurement, Policies, Governance and User Roles
• Mobile Management Adoption, Solutions and Services

Rising SMB Adoption of Mobile Web Sites and Apps for External Users

As noted in The Yin and Yang of Mobile Applications Benefits For SMBs, the study revealed that SMBs increasingly see that customer-facing mobile applications can help them grow revenue, attract and retain customers, and keep up with the competition.

SMBs are using both mobile-friendly web sites and mobile apps to offer functionality to foster this interaction, as shown on Figure 1.

Figure 1: SMB Use and Plans for Mobile-Friendly Web Sites and Mobile Apps

Top 10 Mobile Apps that SMBs Provide for Customers, Suppliers and Partners

Regardless of whether SMBs are employing a mobile-friendly web site, mobile apps, or both, what are the top capabilities that they are providing to external audiences? And what do they plan to add in the next 12 months?

Among a field of 26 possible choices, the solutions in Figure 2 came out on top across small and business respondents.

Figure 2. Top 10 Mobile Functions that SMBs Provide and Plan to Provide to External Users

The study also revealed significant differences in the types of mobile apps SMBs choose to deploy based on industry. For example, the top customer-facing mobile app that professional services firms use is for scheduling appointments, while the top app for retail firms is to enable their customers to buy products/services.

Expanding SMB Digital Presence Via Mobile Solutions

Until recently, most SMBs got along just fine with a corporate website and/or a Facebook page. But SMBs are increasingly finding that they need to make sure that customers can interact with them anytime, anywhere and from any device.

But there are many options and/or trade-offs to think about–mobile web sites, mobile landing pages, mobile payments, mobile apps, etc. Does the company need mobile apps, or will a mobile-friendly web site and landing pages suffice? In addition,

Given limited IT staff and expertise in developing and managing mobile solutions, most SMBs will need help in thinking through these issues, evaluating solution alternatives, developing an effective mobile strategy, and implementing and managing it (Figure 3).

Figure 3: SMB Use/Plans for Mobile Management Solutions

The bottom line is that while mobile apps may be the headline, helping SMBs develop a solid strategy and framework for deploying and managing their mobile environments is likely to provide vendors with an even bigger opportunity in the mobile space.

We asked more than 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers and influencers these questions in the recently completed SMB Group 2012 SMB Mobile Solutions Study, which provides a detailed examination of mobile devices, services and solutions that SMBs use, including:

• Business background
• Information sources and decision-making for mobile solutions
• Penetration of mobile devices and services
• Types of mobile devices used and who uses them
• Policies and governance for mobile solutions
• Mobile applications for internal users (employees)
• Mobile applications for external users (customers, partners, suppliers, etc.)
• Budgets for mobile solutions
• Mobile management

SMBs Top Business Challenges 

In every study we do–including this one–attracting new customers and growing revenue top the list of the most significant business challenges that SMBs face. Maintaining profitability and dealing with economic uncertainty also are raised as significant challenges (Figure 1).

Figure 1: SMB Top Business Challenges

SMB Perception of Business Value from Mobile Applications

In this study, we asked SMBs several questions about the kinds of mobile applications they use. We asked them specifically about what mobile apps their employees use for business purposes, and what external mobile apps and/or mobile-friendly web site capabilities they use to interact with customers, suppliers and partners. We also asked them what they think are the top business benefits they get from using both internal and external mobile apps.

Interestingly, while SMBs believe that they’re receiving significant business value from both internal and external mobile solutions, the primary benefits they associate with these two categories are quite different. As shown on Figure 2, SMBs associate using internal employee-use apps with things like increasing productivity and getting access to people and information more quickly.

Figure 2: Benefits SMBs Associate with Internal (Employee) Mobile Apps

Meanwhile, as indicated on Figure 3, they view external applications as a key means to help them grow revenue, attract and retain customers, and keep up with the competition.

Figure 3: Benefits SMBs Associate With External (Customer, Partner, Supplier) Mobile Apps

Gearing Up for Mobile Growth

The top benefits that SMBs associate with external mobile apps and mobile-friendly web sites align much more closely to their key business challenges–growing revenues, attracting and retaining customers and increasing profitability.

Not surprisingly, this also means that we tend to see somewhat higher demand for the external, customer-facing mobile apps. Some of the areas with the strongest plans to deploy in the next twelve months are applications for external users to: check delivery status of my orders (34%); shop/buy products (31%); and pay for products, goods, or services (29%).

However, SMBs clearly perceive significant business benefits from both internal and external mobile applications–and survey results also reveal that SMBs have healthy plans to increase their use and spending for both internal and external mobile apps. As mobile applications proliferate, vendors can best capitalize on this growth with articulate marketing and messaging that helps SMB customers assess which solutions will best meet their needs.

Figure 1: Who SMBs Turn to for Guidance About Technology Solutions

So when start-up YouDazzle CEO and co-founder Cary Cole told me that YouDazzle will sell its newly launched cloud-based collaboration, storage and online meeting platform via a network marketing distribution strategy, he got my attention. Although companies from Avon to Tupperware have successfully deployed this model, YouDazzle is, as far as I know, the first applications vendor to take this approach.

What YouDazzle Offers

YouDazzle offers small businesses with cloud-based collaboration software that integrates online file sharing, web meetings and screen sharing into a unified service.   As with other small business cloud collaboration offerings, the goal is to make it easy for people to share, access and store any type of file via any type of device. Some of the interesting differentiators include:

• Integration with Dropbox to provide customers with branded data rooms and other extras. You can sync desktop files to YouDazzle with Dropbox  and vice versa; instantly share Dropbox files with up to 100 people at once via YouDazzle web meetings; and add comments to  files.

• Built-in analytics to monitor trends and decision-making processes and provide feedback on deals and projects. You can see who has visited your data rooms, uploaded and downloaded files, provided comments, etc., and  customize how you’re notified about user activity.

Pricing includes three options, all of which include live file sharing, screen sharing, unlimited rooms and guests, activity analytics, Dropbox integration and custom branding. Plans start with the entry-level Pro Plan, at $19.99/month, which includes 1 host and 20 GB of storage, and work up from there. YouDazzle offers a 14-day free trial and discounts on yearly subscriptions.

Taking Network Marketing to the Cloud 

Like companies such as Avon, Silpada, PamperedChef and others, YouDazzle intends to deploy a network marketing strategy to sell its products. Here’s how network marketing works for YouDazzle:

• A $49 sign-up fee gets you in the door to sell YouDazzle. Once you’re signed up, YouDazzle provides you with a business launch pack, which gives you a co-branded replicated web site and storefront (which interfaces with the YouDazzle web site). YouDazzle also provides training via local in person events, webinars, and materials that educate marketers on the network marketing compensation model.

• When you start selling YouDazzle, you earn a 20% margin on your first 3 sales. After that, you make 35% on subsequent sales–and you get a retroactive bump to 35% on the initial 3 sales that you made. Then the network component comes in, where you can make money on top of the network of other YouDazzle marketers that you recruit when they sell.

Cole believes that cloud solutions for small businesses are a good fit for the model, for several reasons.

• The cloud has eliminated the need for marketers to install any hardware or software.
• Unlike network marketing for physical goods, marketers don’t need to invest in inventory (such as the suitcase full of Avon cosmetics).
• Small business owners look to colleagues, friends and family for guidance on technology solutions (as our research also indicates).
• Social media is overtaking traditional advertising and marketing.

Will it Work?

There are many competing collaboration solutions on the market for small business–from Citrix’s “GoTo” solutions to Google Apps. And some of these services are free. But YouDazzle believes it has a good blend of collaboration tools, and that custom branding, an easy to use interface, and strong entry point to current Dropbox users will help it develop a foothold in the market.

Of course, the most intriguing bet that YouDazzle is placing is in its marketing and sales model. Cole thinks the network marketing will appeal to marketers that want to capitalize on the cloud opportunity. As important, he believes that their local, personal touch with prospective customers will differentiate YouDazzle from the typical self-service trial approach that is most prevalent in the small business cloud solutions market (although other approaches are emerging — see Going Beyond Free Self-Service Trials: Raising the Bar in Cloud Computing). The rationale is that a little bit of TLC will help prospects see how to use the tool more productively, boost conversion rates and nurture retention.

In my view, this will be interesting to watch. Although network marketing has worked well in the consumer space for products such as personal care products and jewelry, will it work to sell business solutions to small companies? Sure, small businesses turn to friends and colleagues for guidance, but do they actually want to buy from them?

Another challenge is that people seem to be on opposite ends of the spectrum in their perception of network marketing. Although some people love it, for others network marketing has negative connotations–ala “pyramid marketing.” These people get one whiff of network marketer coming and cross the street–they just can’t face another basket party or make-up demonstration from someone that they may feel some obligation to buy from.

That said, I think a lot of YouDazzle’s success–or failure–rests on how well it can train its marketers. YouDazzle will not only need to teach them how to sell and implement the solution, but also how to make it most relevant to the different requirements of each small business. It will also need to structure things to ensure that marketers strike the right balance between recruiting new marketers, signing on new customers and supporting existing customers. Finally, it will need to help marketers avoid being pinned with the negative network marketing stereotype, by helping them understand things such as when a situation is appropriate for selling and when its not.

Let me know what you think!

This year’s Gallery Walk featured simulated storefronts and back offices to help demonstrate how Intuit’s solutions work for consumers and small businesses in the “real world.” It also provided some great insight into Intuit’s strategic direction in the areas of services and partner programs.

Unfortunately, I didn’t have time to visit every demo at this interesting event! But here are my thoughts on a couple of things I was able to see and learn about–and how they are underscore Intuit’s ongoing transformation from a products to a services company, and from an application vendor to a platform provider.

From Products to Services

My first stop was to see Intuit’s new 401k Plan and Intuit Health Debit Cards. These two services have been in soft-launch mode for the past year or so. Each zeros in on a big pain point for small businesses with 2 to 10 employees–how do I provide benefits for my workers?

The average U.S. worker has less than $10,000 in savings–putting both individuals and the U.S. economy in potentially dire straits. Although small businesses may want to offer 401k plans for their workers, many simply don’t have the time, money or resources to research, set up and administer a 401K for their employees. Intuit’s 401k plan is priced at $75 a month (which is tax-deductible) for businesses and $3 per quarter for employees. The plan gives small businesses a simple, affordable way to offer 401ks to employees. It integrates with Intuit’s Online Payroll solution–and will integrate with QuickBooks and QuickBooks Online soon. I was told that tens of thousands of small businesses have already signed up for this plan.

Given ever-rising healthcare and health insurance costs and all the politics surrounding these issues, Intuit’s Health Debit Card is arguably tackling an even more daunting challenge. Many small businesses simply can’t afford to provide their employees with traditional health insurance plans. Using this program gives, small business employers can set aside pretax dollars in Health Reimbursement Account accounts for their employees. Employees can draw on these funds with a debit card to cover medical costs–doctor visits, prescriptions, glasses, etc. About 1,000 small businesses are currently using this service.

These programs can provide small businesses with options to do more for their employees, helping them to attract and retain the kinds of employees they’ll need to help their businesses grow.

In addition to a broader market launch, more integration to other Intuit solutions, new functionality and options, Intuit is also examining how it might take on a bigger change-agent role in these areas. For instance, the vendor is testing an employee-funded Health Savings Account (HSA) offering, and starting to explore options to offer pooled health insurance small businesses.

These are just two of the areas that highlight how Intuit is transforming into a services vendor in the small business market.

From Applications to Platform

The other area in which I gained a lot of insight into is the ongoing growth of Intuit’s App Center and Intuit Partner platform. I’ve been following this since it launched, and blogged about it in these earlier posts (Intuit Partner Platform: Changing the Rules of Cloud Platforms with Federated Applications and Intuit and Salesforce Partner Up: Who’s the Big Winner?).

Basically, Intuit App Center and Partner Platform help small businesses extend the power of QuickBooks through third-party solutions. At the event, Intuit took the wraps off Intuit Anywhere, which gives developers the ability to reach millions of QuickBooks customers and build data integration directly into their mobile and Web apps. This gives developers the ability to connect their users directly to QuickBooks via a button on their page as easily as connecting to Facebook.

Over the last couple of years, Intuit’s App Center has really taken shape. Over 250 applications are now in the App Center, from big name providers such as Salesforce.com and eBay to a wide range of smaller vendors, including some that might be categorized as Intuit competitors, such as FreshBooks. Through the Intuit Partner Platform, developers get a sales channel, platform services, and a direct route to Intuit’s large installed base.

Data is at the heart of this ecosystem. This means that developer partners not only get access to the two million registered App Center users– they also get a more seamless way to get discovered by potential users. For instance, QuickBooks customers that process a certain number of invoices each month are automatically introduced to partner Bill.com’s billing app. This type of in-context discovery coupled is helping Intuit’s partners convert trials into purchases at a considerably higher rate than standalone free trials.

By connecting more partners and customers into this platform and to each other, Intuit reaps the benefits of the network effect.

Quick Take

As Intuit’s CEO Brad Smith noted in his remarks at the event, Intuit’s mission is to “improve the financial lives of people.” As Smith also remarked, Intuit’s approach to solving for this is to “Get managers out of the way and let people work their magic.”

Judging from the Innovation Gallery Walk, Intuit’s 8,000 employees are working their magic to help Intuit execute on its mission–transforming from a products to a services company, and from an application vendor to a platform provider in the process.

, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the final post in the series.

Empowered customers are reshaping business today. They want a consistent experience between all channels. They compare notes and instantly share. And they can champion a brand or sully a reputation with the click of a mouse. In response to these trends, IBM Smarter Commerce helps companies manage and adapt their commerce processes, putting the customer at the center of their operations.

For this post, we had the opportunity to talk to Alisa Maclin, Vice President, IBM Smarter Commerce Marketing. We asked her about IBM’s views on some of the more nascent trends in this area that may not yet be on the radar for most midsize businesses–but have the potential to create significant shifts in how companies conduct commerce.

Q. While it may have been difficult to predict how radically social media or the rise of smartphones and tablets would affect commerce a few years ago, what are some of the technology trends likely to have a dramatic impact on commerce in the next 5 years or so?

A: We believe that the speed of technological innovation and consumer adoption will continue to accelerate for the next five years and beyond. This acceleration is driving entirely new business models that are changing the landscape between buyers and sellers. The traditional models of B2B and B2C will need to leverage technology to continue to improve efficiencies, while adapting to new models such as Social and Facebook Commerce. The empowered and connected consumer is driving the “consumerization” of business and the empowered citizen is increasingly digitally engaged and networked. For small and medium-sized businesses, the opportunity to embrace technology and the connected consumer is now.

Q: Is there a difference in what B2B and B2C businesses need to think about and do?

A: Yes and no, the lines separating B2B and B2C models are blurring. The empowered consumer looks for the same benefits of mobile and social technologies whether they are at work or at home or on the go. The result is a connected ‘consumer’ that has access to information looking to engage in new ways and do business both locally and globally to meet their needs.

B2B companies need to optimize their digital operations and transform how products and services are created, marketed, sold, delivered and serviced. For example, the influence of ‘self-service’ is universal in both B2C and B2B, with 56% of customers demanding increased self service when they do business with a company, according to Forrester Research in 2011. And, B2C companies need to really look at mobile and social as a ‘must have’ to compete and win their customers and keep them coming back.

Q: In addition to the impact of emerging technology, what other trends–economic, social, regulatory, etc.– do you see happening in the future that will impact how companies buy, market, sell and service?

A: Economic realities affect how companies operate, especially across the value chain. As the number of supply chain partners increases, the need for accurate, time-sensitive information becomes more acute. Many companies will turn to business intelligence and analytics on key control point indicators, such as orders versus forecasts and inventory in transit versus in stock, to move from “sense-and-respond” to “predict-and-act” organizations.

From a regulatory perspective, product lifecycle traceability in consumer products and other industries is a growing requirement. As product lifecycle traceability in many industries is becoming a major concern, the use of smart devices is likely to become more prevalent for tagging products wherever they are, as well as the containers and modes that are transporting them.

Q: How do you envision these changes affecting midsize businesses? What should they do to prepare and take advantage of them?

A: These changes will impact businesses of all sizes. No business is immune, and those that think they are will find themselves at a disadvantage. Midsize businesses can start to put the customer – the empowered customer – at the center of their commerce processes by taking these steps toward Smarter Commerce:

• Listen to their clients to better understand and anticipate customer behavior and turn insight into action.
• Adapt their sourcing of goods and services with a focus on customer demand, and orchestrate seamlessly among their trading partners and suppliers to serve that demand.
• Personalize marketing and selling to your customers as much as possible and keep them coming back for more.
• Evaluate service processes and learn from customers’ behavior to predict and take action.

Q. Do you think Smarter Commerce provides midsize companies a way to level the playing field–by helping them to establish a “virtual presence” in other countries without the physical infrastructure or physical presence?

A: Yes, in a flat world and global access at our fingertips – companies of any size can compete to win. But, just putting a virtual presence out there will not be enough. The key is customer satisfaction, which is tied directly to profitability. Data shows that for every customer who complains of poor service a company loses 10. And, it costs 6 to 7 times more to gain a new customer than to keep an existing one.

The way to stand out will be to incorporate customer-centricity into all your commerce processes. This is not a new concept… but in today’s marketplace it is the difference between thriving and going out of business.

Q: What are some of the things IBM is doing to help midsize companies stay ahead of the curve?

A: You’ll find that much of what we’re doing with our Smarter Commerce initiative is designed to help companies of all sizes to address these market changes. It focuses on three areas organizations need to address – customer insight, strategy and engagement. Companies need deep insight into customer behavior and needs – and the ability to anticipate and predict behavior to take immediate action. This insight, in turn, should drive the development and refinement of their customer value strategy – how to enhance, extend – and redefine value as viewed by the customer – and, the key here, is to do it profitably. And, finally, using that strategy to build customer engagement.

IBM works closely with its Business Partner network to drive this kind of change in the midmarket. For example, working with IBM Business Partner ExactTarget, Skymall was able to deliver more targeted e-mails using analytics-driven behavioral insights. This resulted in recapturing 3-5% of potentially lost revenue from abandoned carts, and helped Skymall to grow email-generated sales by 34%. Another example is RiverPoint, a systems integration consulting firm and IBM Business Partner. They helped The Society of Critical Care run more effective marketing campaigns. Combining IBM’s enterprise marketing management (EMM) software platform with RiverPoint’s best practices EMM consulting has enabled the client to experience a 2.4% positive change in membership attrition in the first year.

This is the final post in a series examining the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. For more information about how IBM Smarter Commerce is transforming midsize companies’ approach to commerce, visit IBM Smarter Commerce for the Midmarket.

To help companies understand IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the final post in the series.

Empowered customers are reshaping business today. They want a consistent experience between all channels.

They compare notes and instantly share. And they can champion a brand or sully a reputation with the click of a mouse. In response to these trends, IBM Smarter Commerce helps companies manage and adapt their commerce processes, putting the customer at the center of their operations.

For this post, we had the opportunity to talk to Alisa Maclin, Vice President, IBM Smarter Commerce Marketing. We asked her about IBM’s views on some of the more nascent trends in this area that may not yet be on the radar for most midsize businesses–but have the potential to create significant shifts in how companies conduct commerce.

Q. While it may have been difficult to predict how radically social media or the rise of smartphones and tablets would affect commerce a few years ago, what are some of the technology trends likely to have a dramatic impact on commerce in the next 5 years or so?

A: We believe that the speed of technological innovation and consumer adoption will continue to accelerate for the next five years and beyond. This acceleration is driving entirely new business models that are changing the landscape between buyers and sellers. The traditional models of B2B and B2C will need to leverage technology to continue to improve efficiencies, while adapting to new models such as Social and Facebook Commerce. The empowered and connected consumer is driving the “consumerization” of business and the empowered citizen is increasingly digitally engaged and networked. For small and medium sized businesses, the opportunity to embrace technology and the connected consumer is now.

Q: Is there a difference in what B2B and B2C businesses need to think about and do?

A: Yes and no, the lines separating B2B and B2C models are blurring. The empowered consumer looks for the same benefits of mobile and social technologies whether they are at work or at home or on the go. The result is a connected ‘consumer’ that has access to information looking to engage in new ways and do business both locally and globally to meet their needs.

B2B companies need to optimize their digital operations and transform how products and services are created, marketed, sold, delivered and serviced. For example, the influence of ’self service’ is universal in both B2C and B2B, with 56% of customers demanding increased self service when they do business with a company, according to Forrester Research in 2011. And, B2C companies need to really look at mobile and social as a ‘must have’ to compete and win their customers and keep them coming back.

Q: In addition to the impact of emerging technology, what other trends–economic, social, regulatory, etc.– do you see happening in the future that will impact how companies buy, market, sell and service?

A: Economic realities affect how companies operate, especially across the value chain. As the number of supply chain partners increases, the need for accurate, time-sensitive information becomes more acute. Many companies will turn to business intelligence and analytics on key control point indicators, such as orders versus forecasts and inventory in transit versus in stock, to move from “sense-and-respond” to “predict-and-act” organizations.

From a regulatory perspective, product lifecycle traceability in consumer products and other industries is a growing requirement. As product lifecycle traceability in many industries is becoming a major concern, the use of smart devices is likely to become more prevalent for tagging products wherever they are, as well as the containers and modes that are transporting them.

Q: How do you envision these changes affecting midsize businesses? What should they do to prepare and take advantage of them?

A: These changes will impact businesses of all sizes. No business is immune, and those that think they are will find themselves at a disadvantage. Midsize businesses can start to put the customer – the empowered customer – at the center of their commerce processes by taking these steps toward Smarter Commerce:

• Listen to their clients to better understand and anticipate customer behavior and turn insight into action.
  
• Adapt their sourcing of goods and services with a focus on customer demand, and orchestrate seamlessly among their trading partners and suppliers to serve that demand.
  
• Personalize marketing and selling to your customers as much as possible and keep them coming back for more.
  
• Evaluate service processes and learn from customers’ behavior to predict and take action.
  

Q. Do you think Smarter Commerce provides midsize companies a way to level the playing field–by helping them to establish a “virtual presence” in other countries without the physical infrastructure or physical presence?

A: Yes, in a flat world and global access at our fingertips – companies of any size can compete to win. But, just putting a virtual presence out there will not be enough. The key is customer satisfaction, which is tied directly to profitability. Data shows that for every customer who complains of poor service a company loses 10. And, it costs 6 to 7 times more to gain a new customer than to keep an existing one.

The way to stand out will be to incorporate customer-centricity into all your commerce processes. This is not a new concept… but in today’s marketplace it is the difference between thriving and going out of business.

Q: What are some of the things IBM is doing to help midsize companies stay ahead of the curve?

A: You’ll find that much of what we’re doing with our Smarter Commerce initiative is designed to help companies of all sizes to address these market changes. It focuses on three areas organizations need to address – customer insight, strategy and engagement. Companies need deep insight into customer behavior and needs – and the ability to anticipate and predict behavior to take immediate action. This insight, in turn, should drive the development and refinement of their customer value strategy – how to enhance, extend – and redefine value as viewed by the customer – and, the key here, is to do it profitably. And, finally, using that strategy to build customer engagement.

IBM works closely with its Business Partner network to drive this kind of change in the midmarket. For example, working with IBM Business Partner ExactTarget, Skymall was able to deliver more targeted e-mails using analytics-driven behavioral insights. This resulted in recapturing 3-5% of potentially lost revenue from abandoned carts, and helped Skymall to grow email-generated sales by 34%. Another example is RiverPoint, a systems integration consulting firm and IBM Business Partner. They helped The Society of Critical Care run more effective marketing campaigns. Combining IBM’s enterprise marketing management (EMM) software platform with RiverPoint’s best practices EMM consulting has enabled the client to experience a 2.4% positive change in membership attrition in the first year.

This is the final post in a series examining the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. For more information about how IBM Smarter Commerce is transforming midsize companies’ approach to commerce, visit http://www-01.ibm.com/finder/businesscenter/us/en/its_commerce_topic.wss]

With these requirements in mind, Dell recently announced the acquisition of AppAssure–the company’s first acquisition since launching its new Software Group. AppAssure will be part of Dell’s enterprise storage and software line-up, and underscores Dell intent to extend its footprint in the storage solutions market. The acquisition helps Dell take another big step in its enterprise solutions strategy and deliver a Fluid Data architecture that automatically and intelligently optimizes and protects data everywhere.

AppAssure’s software solution, billed as next generation data protection, provides continuous backup protection across physical, virtual, and cloud-based storage environments and includes the following capabilities:

• Snapshot and replication
  
• Data de-duplication and compression
  
• Backup and restore
  
• Archiving
  

Market demand for this type of solution is reflected in AppAssure’s success to date. Since its launch in 2006, AppAssure has expanded to 230 employees and more than 6,000 customers worldwide, with 194% revenue growth year-over-year for 2011.

PERSPECTIVE

The top four technology challenges for the SMB and mid-market companies are (Figure 1):

• Containing technology related costs
  
• Implementing new solutions and upgrades
  
• Keeping my systems up and running
  
• Integrating different applications
  

Figure 1 SMB and Mid-market Top Technology Challenges

Source: SMB Group 2011 Small and Medium Business Routes to Market Study, November 2011

As the complexity of storage requirements rises, these challenges have become more pronounced in the storage space as SMBs have tried to piece together disparate solutions from multiple vendors to ensure data protection and business continuity/disaster recovery.

With AppAssure, Dell can provide SMBs with storage capabilities not only for their physical servers but across to virtual and cloud computing environments–which are increasingly the environment of choice for SMBs. Regardless of the data environment, AppAssure Backup and Replication provides backup/restore, archiving, and disaster recovery, simplifying administration with near instant, reliable data recovery. AppAssure also protects application software in both virtual and physical environments.

AppAssure is part of Dell’s broader “fluid data” architecture (Figure 2), which is designed to put the right data in the right place at the right time, at the right cost. It provides a unified storage architecture to manage data more cost-effectively and efficiently–thereby addressing the key technology challenges that SMBs face. At a high level, the Dell Fluid Data architecture can help SMBs manage the growing data avalanche in a more intelligent and streamlined way. In addition to the capabilities enabled by AppAssure, Dell’s storage architecture and solutions (Figure 2) address a broad range of storage management needs including:

• Ability of handle file, block and object-level data to support a variety of applications, from Microsoft Exchange to virtualization solutions to databases to social media applications.
  
• Automated support for multi-tier storage (primary, backup and archive data) to control rapidly escalating storage costs and compliance requirements.
  
• Automated data protection and replication, eliminating the need for daily manual intervention.
  
• Support for business continuity and disaster recovery.
  

Figure 2 Dell Unifying Storage Architecture


Source: Dell

Rapid data growth driven by new applications such as rich-media, social media, 64-bit architectures and compliance solutions requiring availability of data for very long time-periods is causing increases in storage system costs, storage infrastructure complexity, and power and cooling costs. Dell’s end-to-end storage management solutions help SMBs get some of these storage costs under control, for instance:

• Data reduction technologies such as data de-duplication and compression allow SMBs to control data growth rates by eliminating redundant data. This enables more efficient use of existing storage assets and helps users defer capital expenditures for new storage systems as they reduce disk capacity requirements. They also help decrease bandwidth requirements for data transfer.
  
• Tiered storage architectures allow users to control storage hardware costs based on business value and frequency of access. Higher performance, higher cost storage resources can be dedicated to mission critical initiatives, and lower performance and cost solutions can be allocated for back up and archiving.
  
• Storage virtualization helps address storage costs by improving resource utilization, data mobility, information availability and related IT resources required to manage storage environments.
  
• Business continuity and disaster recovery solutions reduce the impact of unexpected outages. By helping to keep the business up and running, they protect against potential revenue loss and brand damage due to outages.
  

QUICK TAKE

Dell’s acquisition of AppAssure and its continued focus on end-to-end storage management solutions provides several benefits to SMBs in addition to cost savings:

• Ability to manage a mixed environment of physical, virtual, and cloud-based storage in a unified storage management solution.
  
• Reduced IT resources needed for data storage management.
  
• Ease of doing business with a single vendor for an integrated storage management solution.
  
• Significant storage capacity savings afforded by storage consolidations and sophisticated deduplication/compression technologies.
  
• Support for the most widely adopted virtual solutions – Microsoft Hyper-V, VMware, vSphere and Citrix XenServer.
  

And, with SMB market adoption of virtualization and cloud solutions rising, Dell’s timing couldn’t be better. The interest among SMBs to acquire/upgrade IT infrastructure management and virtualization solutions is very high (Figure 3), driven by the need to address IT environment complexity and increasing costs.

Figure 3 Solutions Purchased/Upgraded and Future Plans

Source: SMB Group 2011 Small and Medium Business Routes to Market Study, November 2011

That said, SMBs need better guidance in this area. Dell can significantly strengthen its story–and sales–by making it easier for the SMBs to easily understand the scope of it storage systems and end-to-end storage management offerings and pinpoint the “best-fit” solution(s) for their needs through the following:

• Compararative information and visuals on Dell’s web site-replacing pages of detailed information and specs that illustrate Dell solutions and provide guidance on when and why different systems are relevant
  
• Web-based tools for needs assesssment and recommendations.
  
• Proof points in the form of customer references, return-on-investement and total-cost-of-ownership calculations that illustrate the financial and efficiency benefits of Dell’s integrated approach.
  

By providing education to SMBs and clarifying its storage story, Dell can make the most out of its push to extend beyond the hardware business to provide business computing solutions that are innovative, yet practical–and geared to both SMBs as well as large enterprises.

IBM’s 2011 IBM CMO study, From Stretched to Strengthened, took an in-depth look at how 1,734 Chief Marketing Officers (CMOs) (including a sample of midsize companies) are thinking about and dealing with these mega-changes. It’s interesting to look at these results, and how one of the midsize companies that we spoke with recently is navigating through this transformation.

Top Market Forces and CMO Concerns and Readiness to Address Them

CMO study respondents of midsize companies are struggling with four major market forces: decreasing brand loyalty, the explosion of data, proliferation of channels and devices, and social media.

Unfortunately, change is difficult–and most CMOs feel ill-equipped to address these new requirements, as shown in Figure 1.

Figure 1: Percent of CMOs Reporting Underpreparedness

To me, this level of concern isn’t surprising. Social and technology changes are escalating at a breakneck pace, in an increasingly volatile world. Wrapping your head–let alone a marketing organization–around these rapid, often unpredictable changes isn’t for the faint of heart.

Charting a Course for Change

The good news is that the vast majority of CMOs see three key areas that they need to take action in to address theses challenges by:

• Delivering value to empowered customers
  
• Fostering lasting connections
  
• Capturing value and measuring results
  

What does this really mean? Customers have always wanted companies to listen to them and to act on the input they provide. They’ve always wanted companies to value their time and their recommendations as well as their money. But today, technology gives customers better, faster access to information, people, products and services–giving them more control over the commerce process and enabling them to wield more influence with other buyers.

Customers increasingly expect anywhere, anytime, any-device access to information throughout the commerce cycle–from information gathering, evaluation and selection, to purchase and service. They expect vendors to do a better job of meeting–or even of anticipating–their needs. This means that vendors need to understand not only “the market” but individual customer requirements and preferences, and deliver solutions to attract, interact with, acquire and retain customers on a much more personal level.

In the digital age, this means that CMOs must develop automated processes to tap into multiple channels and customer touch points. And they need new analytics capabilities to gauge and tune marketing and commerce initiatives in an actionable way at a one-on-one level.

In a nutshell, CMOs and marketing organizations need to radically reinvent marketing with automated digital and analytical processes that help them to deliver more value to customers.

Taking a Proactive Approach

IBM’s study also revealed that CMOs in outperforming companies are more proactive than their peers in tackling these issues. These CMOs are investing now to better understand individual customers as well as markets, and using analytics to help them do a better job of zero in on customers’ needs to deliver a better experience and build customer loyalty.

For instance, CustomInk, a 300-employee custom t-shirt company, uses IBM Software for Enterprise Marketing Management, specifically IBM Coremetrics, to improve the customer experience and grow the business. CustomInk relies on a Coremetrics dashboard to monitor daily key performance indicators (KPIs), such as: What percentage of site visitors go to its Design Lab? How likely is a visitor to save a design? How do aesthetic changes improve conversion rates? CustomInk uses these metrics to determine what’s working and what isn’t. For example, if the percentage of customers who save a design is low, it may be because something is broken and the customer can’t load the design. Or there may be an overload of visitors from unqualified sources.

IBM software also provides CustomInk with the ability to monitor key paths through its site on a daily basis. This enables CustomInk to determine where people “fall off” on different paths. The company can see when changes it makes are beneficial, detrimental or neutral to customer behavior. For example, CustomInk has learned that small, aesthetic changes in color or type font, or changes in button styles or colors, can impact movement through the site and affect the drop-off rate.

Perspective

CustomInk drives home the point that a company doesn’t have to be part of the Fortune 500 to ride the waves that these social and technological changes are ushering in. In fact, because SMBs can often act in a more agile and nimble fashion than large companies, they may actually have an advantage over larger companies.

However, any business must start by making a conscious decision to transform their marketing team for this customer-centric world, and develop a strategy that revolves around customer engagement and interactions. Some key questions to get started include:

• How can the business use customer interactions to better anticipate and respond to requirements, and improve the customer experience?
  
• What are the different customer and prospect touch points in your organization, and how can they be strengthened?
  
• Do we know where customers and prospects are talking about your products and services, competitive brands and related industry trends?
  
• How do we best bring customer conversations into the company to help us better serve their needs?
  
• How will we measure and analyze the results of what we’re doing?
  
• How can we make the information and insights we get actionable?
  
• What skills and solutions will we need to achieve our goals?
  

While each company will have different goals, metrics and requirements, one thing is crystal clear: the art and the science of marketing is undergoing a radical change. CMOs and marketing organizations need to take a proactive approach to use them to their advantage.

This is the sixth in a series of blogs by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. For more information about CMO perspectives on several issues, see the full results of IBM’s 2011 IBM CMO study, From Stretched to Strengthened.

Recently, Brent Leary and I had the opportunity to talk with Gareth Beer, Ecommerce Manager for Speedo International and learn about how Speedo International is applying smarter commerce philosophies and solutions to better serve its customers. We think Beer’s insights about Speedo’s experience in this area illustrate how important it is for a company to start with a strong vision for delivering a great customer experience–and how to execute to make that vision a reality.

Start with the Customer

Anyone that’s ever been near a pool let alone belonged to a swim team knows the iconic Speedo swimwear brand. But, we do need to supply a bit more background to put this post in context for our discussion.

Speedo International is a subsidiary of Pentland Brands with headquarters and about 200 employees based in Nottingham, UK, and operations around the globe and sales in 180 countries. Up until 2008, Speedo International had been a traditional wholesale business, with retailers serving as its sole sales outlet to customers. The company had no desire to compete with its retail partners, but consumers were clamoring for better access to the full range of Speedo products, in all sizes and colors–which they couldn’t always find in their local stores.

Bringing Speedo International online was an obvious solution to providing customers with better access, but Speedo faced a dilemma common to many companies in this position–the threat of potential channel conflict. But as Beer told us, “Speedo understands that many customers will use the site to search, browse and add to the cart and ultimately buy at a local store.” Speedo’s goal is to give customers a place to search, browse and find information–and then purchase the product wherever they choose.

Zero in on Objectives

In line with these goals, Speedo International needed to create a site with detailed photos, images, descriptions, fitting guides, FAQs and videos of all Speedo products; the ability to purchase; and customer feedback mechanisms. Speedo had a jump-start because Pentland, its parent company, was already running IBM WebSphere Commerce for all of its companies, making this platform the natural choice for Speedo.

So Speedo’s ecommerce team got busy figuring out what analytics capabilities they wanted. They were looking for a solution that “would let us go to another level of thinking, beyond looking at visitors and traffic. We wanted to really understand the customer, how they behave, how they think and how they liked to be interacted with, so that we could optimize marketing, retention and recruitment,” according to Beer. The company also wanted the flexibility to gather and analyze new sources of information as requirements evolved.

After investigating different solutions, Speedo International selected IBM’s Coremetrics for several reasons. First, Coremetrics was available as subscription-based cloud service, and pre-integrated with WebSphere Commerce, which meant that Speedo didn’t need to spend time on technical implementation and integration.

More important, Beer advised us, was that “all the data is in one place and we have a common interface across the 12 Coremetrics modules we use. Other vendors have similar tools, but with Coremetrics, we get the different capabilities we need, from measuring the effectiveness of pay-per-click campaigns to creating personalized interactions with top customers.

Create a Virtuous Cycle

Some of the many ways Speedo uses Coremetrics are to:

• Track KPIs for sales, orders, visitors, stock and margins, and its consumer index score, which rates customer experience with Speedo.
• Gauge the effectiveness of pay per click campaigns and retargeting efforts.
• Get a clear view of who the customer is, how they behave, and how they like to be spoken to.
• Set and meet service level agreements to pick, pack and dispatch orders.

As a result, Beer’s team can deliver feedback to business decision makers more rapidly. “We can quickly pick up on trends, what’s working, what’s not, what colors and styles people like or don’t like. Then the business can make better commercial decisions faster,” Beer told us.

Using the Coremetrics Lifecycle module, Speedo also gains a complete view of its top customers, which enables it to do things such as offer more personal attention and rewards, and encourage them to post more ratings and reviews. In turn, this gives Speedo more data to feed back to the business, turn top customers into advocates, and generate more business.

Speedo International has held fast to its pledge not to compete with its retailers on price. However, about 15% of Speedo’s customers pay a premium to buy on the Speedo site. Speedo’s research indicates that these customers buy on direct because of the exceptional customer service experience that Speedo delivers–facilitated to a large extent by WebSphere Commerce and Coremetrics.

A Work in Progress

Speedo International launched a Facebook page about 18 months ago. It uses Coremetrics to make sure that Facebook information jives with information on its estore, and to track how many people go to the estore from Facebook. Speedo can append Facebook images, URLs, etc. with tags which feed into Coremetrics. Using these tags, Speedo can also create special product offers, or have people vote on colors on Facebook, and see how many people come to the estore as a result of these campaigns.

One of the most compelling parts of Speedo’s strategy that Beer discussed with us is to “put any Speedo store on top of WebSphere Commerce, and have one place underneath as a common foundation for all stock and inventory management.” In 2012, Speedo plans to launch a new Facebook store, a new mobile store and create stores in key European countries with localized content, currency and language. The unified WebSphere Commerce foundation will ensure consistency and continuity of the customer shopping experience across these different sites.

Summing Up

Beer summed up his perspective by saying “the business is all about the customer. We need to be in as many channels as customers are in and align them as closely as we can–whether the customer is on smart phone, iPad or in a brick and mortar store. The goal is to have consistency and visibility across these channels and heighten our understanding of the customer.”

We couldn’t have said it better.

This is the fourth of a six-part series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions.

In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the fourth post in the series.

Christmas 2011 is a great example of Smarter Commerce in action. It’s a lesson in why businesses need to transform the way they market and sell their products and services. According to the National Retail Federation, retail industry sales for the 2011 holiday season increased 4.1 percent year-over-year to $471.5 billion, beating its expectation of 3.8 percent growth. And while the overall numbers probably made for a pleasant holiday for the industry as a whole, what was happening online was astounding:

• US online holiday shopping season reaches a record $37.2 billion, up 15 Percent vs. 2010 – a rate of increase almost 4X higher than the overall rate for retail.
• A post-holiday 2011 retail study from Kabbage, Inc. focusing on small-to-medium online merchants found 69% of respondents reporting increased sales. On average, study participants experienced a 32% hike in sales compared to the 2010 season.
• As late as one week before Christmas 2011, one-quarter of consumers hadn’t even started holiday shopping. (Consumer Reports)
• 93% of retailers have offered free shipping at some point during the season vs. 85% last year. (USA Today)
• The 2011 US Holiday Season edition of the ForeSee Results E-Retail Satisfaction Index of the top forty Internet retailers increased by a point from 78 to 79 (on a scale of 1-100)
• Almost one in four retail searches online on Christmas Day were made using mobile phones or tablet devices, according to the British Retail Consortium (BRC).
• The number of adults in the United States who own tablets and e-readers nearly doubled from mid-December to early January, according to a new Pew Research study. (New York Times)

Technology’s Impact on Behavior Is Accelerating

The world is changing. While still a fraction of the overall sales figures, ecommerce is growing at a much faster rate than traditional retail. And not just for the big retailers. As the Kabbage study illustrates, small and midsize online retailers enjoyed tremendous growth as well. This in part stems from the effect technology is having on the customer buying process, and the ability of companies to adapt their business processes to support online shopping.

When you think about twenty-five percent of shoppers not starting their Christmas shopping until after December 18^th, it really hits home how the process of shopping has changed. Five to ten years ago most people still were going to multiple stores in search of ideas for things to buy, to find recommendations, compare items, and to look for deals, so they had to start their shopping efforts earlier. Now they can do most of that online – with a lot less time involved. And from the online retailer’s perspective, they leverage the latest technology not only to provide this information to online shoppers, but also to deliver the goods on time as well. Jewelry specialist Blue Nile offered free FedEx shipping guaranteed to arrive by Saturday, December 24, for all orders placed as late as 7 p.m. the day before (Friday, December 23). And other online retailers offered similar shipping capabilities.

This all adds up to shoppers more efficiently finding what they want, knowing the price they want to pay and having the confidence of getting it in time – with the added benefit of not having to wrestle with issues like parking, crowded malls, weather etc.. And as both companies and consumers accelerate their technology adoption, look for ecommerce to steadily increase its portion of the retail pie while customers leverage social and mobile to decrease the time and effort it takes to buy things.

Technology’s Impact on Behavior is Dramatically Affecting Expectations

One of the more interesting developments is how technology is impacting customer expectations as well as their behavior. Now that companies like Amazon can get items to us in two days for free, we expect this kind of service all the time. And while 93% of them did offer free shipping at some point during the holiday season, a study also showed 73% of consumers recently surveyed by MarketLive named “free returns” as a top promotion in determining their online purchasing behavior.

This is a great example of customers understanding what technology can do, and expecting vendors to find ways to leverage it to continuously improve their shopping experience. And improving the experience is crucial to keeping customers satisfied. According to the ForeSee study, satisfaction scores are important because a one-point change in website satisfaction can predict a 14% change in revenues generated on the web. And when they were highly satisfied with a purchase:

• 64% of survey responders said they were more likely to buy from the same company the next time they needed a similar product;
• 67% were more inclined to recommend the company to others; and
• 65% felt a sense of ‘brand commitment’.

This illustrates that investing in improving customers’ web experience is a terrific way to build brand loyalty and capture the benefits of viral marketing (or something like this).

A Christmas Carol…

You really don’t have to look much further than Christmas Day 2011 to see how technology has changed customer behaviors and expectations. Digital content & subscriptions (digital downloads of music, TV, movies, e-books and apps) accounted for more than 20 percent of sales on Christmas Day. On any other day of the holiday season, that number was only 2.8%. And these numbers were driven by the rise of mobile devices, with the iPad leading the way on Christmas Day with a staggering 7% of all online sales coming through just that one device – accounting for 50% of sales that day, according to the IBM Coremetrics Benchmark.

While the numbers tell the story, it really hits home personally when I saw my parents (both octogenarians) sitting at the kitchen table Christmas Day – my father with his iPad, and my mother with her Kindle Fire. And my mother, having received the Fire as a gift, was reading an ebook she purchased Christmas morning… with an Amazon gift card.

This is a totally different story of Christmas than Charles Dickens told in the 19^th century, but it’s a tale of what to expect in the 21^st century when it comes to customer engagement. Because of technology and its empowering effect on customers, they are developing “great expectations” their vendors must live up to. Which means vendors must be smarter in their approach to smarter, more informed customers.

This is the fourth of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll look at key points to consider when planning a smarter commerce strategy. In our next post, we’ll look at IBM’s Smarter Commerce offerings to help illustrate how midsize companies can reshape the way they do business to meet the expectations and needs of smarter customers.